Market trend

Platforms: Scaling up business growth

About 46 % of the total 1 billion dollar plus platforms are based in the US, while 35 % are based in Asia (mostly in China), 18 % are based in the EU and 10 % in Latin America.
(Source: Deposit Photos)

The sheer scale at which platforms can grow is unimaginable. MM International goes through some live examples to showcase the potential of these platforms and also tracks the major countries leading the platform economy.

Platforms have been developing rapidly in the past few years as compared to the more stable and traditional companies in the market. To understand this scenario better, let us go through some examples. The traditional auto maker BMW was formed in 1916 and by the mid 90’s comprised of 116,000 employees. By 2016, the automotive giant had a market capital of 45 billion dollars. On the other hand, the new car app Uber was formed in 2009, comprises of 7,000 employees and has a market capital of 60 billion dollars!

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More examples

In the hospitality space, Marriott is another example. Established in the year 1927, the five star Group has 200,000 employees and has a market value of 49 billion dollars whereas, the Airbnb platform was set up in 2008, possesses 3,100 employees in 2017 and has a market capital of anything between 53 billion to 65 billion dollars. In addition to this, Walt Disney was established in 1923, comprises 201,000 employees and enjoys a market capital of 236 billion dollars whereas the social media platform Facebook was set up in 2004, employs 30,275 people and has a market capital of 515.892 billion dollars.

From these examples it is evident that platforms arrived later into the market as compared to traditional companies however, platforms have overtaken the companies in terms of market value in a very short period of time. This is the true potential of platforms as it can scale-up without much difficulty.

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Leading platform giants

The USA and China lead the platform economy, according to a 2018 report by Consultancy.org. It further mentions that 46 % of the total 1 billion dollar plus platforms are based in the US, while 35 % are based in Asia (mostly in China), 18 % are based in the EU and 10 % in Latin America. In terms of market value, the US firms including Apple, Amazon, Microsoft, Google and Facebook are the clear leaders with a share of 72 % followed by Chinese firms such as Alibaba and Tencent at 25 % and the European Union at 2 %.

Platforms have opened new avenues for customers as they get access to numerous products or services on a single platform. However, it is often criticised for making people addictive to the internet and also for extracting personal data of people using the platform.